Sın hf. : 69% increase in income but no synergies realized yet

(May 16, 2018)

The interim financial report for Sın hf. for the first quarter of 2018, was approved by the company's Board of Directors and CEO at a board meeting on 16. May 2018.

At the company's Annual General Meeting in March, it was agreed to change the company's name from Fjarskipti hf. to Sın hf. In December 2017, the company purchased certain assets and operations of 365 miğlar hf., and the effect of this is can be seen in the comparison of amounts between years. One-off items regarding the acquisition affected the quarter's results and the adjusted results are shown below. The one-off items consist of several different items connected with the purchase.

· Income in the first quarter of 2018 amounted to ISK 5,304 million, an increase of 69% from the previous year.

· The quarter's EBITDA amounted to ISK 718 million, the same as the previous year. The adjusted EBITDA, in accordance with the above, amounted to ISK 833 million, an 11% increase from the previous year.

· Profits in the period amounted to ISK 56 million, a decrease of 72% from the previous year. The period's adjusted profits amounted to ISK 150 million, a 33% increase when compared to the same period of the previous year.

· Profits per share were 0.20.

· The adjusted EBITDA, in accordance with the above, amounted to ISK 522 million, a 61% increase from the previous year.

· EBITDA outlook for 2018 is estimated at ISK 4,000-4,400 million from regular operations. The estimated investment ratio is unchanged at 8-10% of income.

Stefán Sigurğsson, CEO:

"It is pleasing to see the merged company's first quarter show a revenue increase of 69%, which exceeds expectations. The first step of the merger has been to ensure the transfer of the company's customers and revenue, which has been successful so far, despite the heavy workload associated with integration. The quarter's costs are high, as no synergies are realized yet. Merger costs were however considerable during the quarter, as well as depreciation and financial expenses following the increase in balance sheet. The plan for the year is to lower the costs of the merged company, with synergies increasing steadily throughout the year. The company still plans to achieve syngergies amounting to ISK 1,000-1,100 within 18 months, i.e. approximately 60% of the total EBITDA increase plan for the purchase. The plans that the merged company will have an EBITDA of over ISK 5 billion in 2020 are unchanged.

The merged company, under the name Sın, is a telecommunications and media company offering broad services. According to a new report by the PTA, the company had the second largest market share in the mobile market (32.8%), broadband (37.1%) and IPTV (47.4%) at year-end 2017.

The first months of the merger have been postive, and the merger should be fruitful for all stakeholders. In addition to the estimated EBITDA of over ISK 5 billion in 2020, the employees will be joined under one roof during the year, in the company's new headquarters at Suğurlandsbraut 8-10. For consumers, the price of television subscription packages decreased whilst other packages were expanded. These changes have been part of the planning regarding the purchase from the beginning and are therefore included in the prospects of the merged company. By doing this, we aim to press forward and give more people the chance to subscribe to high-quality Icelandic and international TV programming and live sports," says Stefán Sigurğsson, CEO of Sın.